The transfer value of Neymar, estimated at 32 million euros by the Football Observatory, greatly surprised the players in the field. The head of the CIES, Dr Raffaele Poli, explains the econometric approach of the observatory which allowed us to achieve this surprising result, to say the least.
Raffaele Poli, how to explain that, according to your calculations, the transfer value of Neymar is 32 million euros, knowing that a specialized site like Transfermarkt values it at 128 million euros?
Yeah, well, we’re not Transfermarkt. They also measure notoriety, no doubt. I don’t know if you’ve read this recent article, which explained the Transfermarkt process well. They are enthusiasts who look a little at the aura of the player. A player who is at the end of the contract still has value for them, they talk about market value, not transfer value. We are not quite in the same register. But it’s true, you’re right, Transfermarkt is a bit of a benchmark. They are even used by clubs. But it doesn’t mean to be the same approach.
What does your methodology consist of?
Our approach consists in listing all the transfers that have taken place in the past, all those for which we have been able to recover a paid transfer value for which there are the various media, FIFA publications, or stock market publications. By crossing different sources, we get a relatively precise idea of the price that was paid for the different players. And based on that, we looked after what could determine this price, paid in the past for the players in question. And finally apply the different coefficients on the different variables to predictively estimate the right price for the current player. And by bringing together other elements as well. By talking to market players, things that are also common knowledge. In particular, the age of the players was taken into consideration in determining the prices. Because a younger player, other thing being equal, will be more valuable than an older player. It is not precisely decreasing. Age groups have been determined between which the player’s price will decrease more or less significantly. But generally speaking, the older the player, the lower his transfer value will be. Because he will have fewer years of career ahead of him.
>>> PSG: « Neymar is absolutely out of the ordinary, Mbappé is not », judge Riolo
Do you do the same with the duration of the contract?
Again, it is not completely linear. A player between five and four years old doesn’t change anything from my point of view. It’s a long contract. Between four and three, there is a drop every month. And it is more important between three and two, and even more important between two and one. It is a first principle of explanation of the rather important fall of Neymar, and of Mbappé as a corollary too.
If Neymar extended in the coming months, would his transfer value increase?
Exactly, and this is normal. Why ? What is the transfer fee? It is the indemnity for breach of contract, there is nothing more than that. The longer the contract, the more the club which will recruit the player will have to pay dearly for this rupture in question. This penalizes very strongly, whether it is Messi, Neymar or Mbappé. These are players who have less than two years of contract – Ronaldo too, by the way – and therefore, suddenly, the home club, in the negotiations, has less negotiating power. Precisely because he knows that at the end of this contract, the player will go free. So it puts enormous pressure on the club to which it belongs, hence the need – as we already said last season – for PSG to extend Neymar and Mbappé. What is amazing is that they haven’t already. Because usually, if the great players want to stay, the club wants to keep them, it is rare that they reach durations of less than two years. Because otherwise it opens the door to a departure. This is also, somewhere, the weakness of the PSG project.
Can the exceptional situation we are currently experiencing, with the health crisis which is causing great uncertainty over the future of certain clubs and the market, explain this in part?
It may be an explanation. Because when we talk about an extension, we are actually talking about salary increases or at least continuing to pay large sums of money. You are quite right. But casually, we’re talking about transfer value here. And this situation penalizes the club to which it belongs, and necessarily lowers the player’s transfer value. Knowing that in the case of Neymar or Mbappé, things will go very quickly. If they don’t extend, they leave for free. It’s zero. You see what it could represent as a cataclysm for PSG to have paid players more than 400 million euros and to see them leave for free. All the more so for Mbappé who is still very young.
Neymar is also in this age group, he will soon be 29 years old, where his value will drop every year, because he is gently approaching the end of his career. Even if today we have examples of players who last long enough, these are exceptions. There is Lewandowski, it’s true, maybe Ibrahimovic, if you look at the forwards. We may be witnessing a change, but we are looking into the past. Neymar will maybe play until 40 and we would be denied, but that would be improbable. It’s rare.
The injuries and the number of games played compared to the performance that was expected from Neymar, does that come into your calculations?
This is the third most important aspect. If you look at Neymar’s statistics. This may be a weakness of the model, but we did a lot of testing. We finally take the performance over the last two years. If we took three or four years, that ultimately added nothing to the significance of the model and its explanatory power. We didn’t break our heads. And besides, that did not do him so much service.
Why ? Because it makes sense that a club, in the context of a transfer, looks first at the recent performances of the player, rather than the older ones. A two-year limit has been defined, depending on the various tests carried out. This means that the model has no historical memory. For a player like Neymar, this is a criticism that one can quite receive for this low valuation, given the aura of the character and what he has shown in the past. But the model doesn’t see what he’s been up to for the past two years. And if we look at his performances over the last two, especially the minutes of play, that penalizes him enormously.
There is also the Covid. The stoppage of the French championship penalized the Ligue 1 players compared to the others, who were able to finish their championship. It should not be forgotten. The end of the championship did not do good. The clubs complained about it at the time, they gave it as an argument vis-à-vis the Federation. The players are penalized for not being able to show their talent. And for Neymar who, moreover, when the situation was normal, was often injured, this penalizes enormously. When we say less minutes of play, we say less goals, less assists, less assists. Everything brings him down, necessarily, since he has not played.
Regardless, when he plays he has excellent stats. He has scored a little less this season in the league, almost one goal per game in previous seasons. In the Champions League, he has already scored one goal per game. He is a great dribbler, there is no doubt about it, he is perhaps the best in the world in this exercise in terms of number of dribbles and percentage of success. But the fact that he is relatively old, that his contract term is approaching the end … After that, I do not want to start saying that he is not a good player. He’s an excellent player, the stats show. Except he doesn’t play. If we take this two-year period, it penalizes him enormously.
Are the performances of Paris Saint-Germain overwhelming?
It is not the individual performances alone that enhance a player, it is also obviously the success of the team. It is true that PSG achieved good performances in the Champions League, they are qualified, they have played more games, so it rather values them. But at the moment, they are not the first. And they’re averaging two points per game, barely. This is not likely to promote the player.
What you don’t take into account is what a club might be willing to invest in a player versus what it might earn them. In the case of Neymar, a considerable sum justifying a very high sum, is that right?
It’s hard to set that up, the aura of a player. What do we take? Followers? It would be possible. But afterwards, how many players does it concern? Superstars are a bit of a unique market. For 95% of gamers, I think the price range is very good. For a player like Neymar, and the criticism is quite admissible, we could say that beyond his sporting performances, and the objectivable criticisms that we have just reviewed, it is difficult to express an opinion in such a way. certain. And no doubt that this aura, of which you speak, would still be taken into account. Because we buy ourselves a brand by taking a player like Neymar. But, there aren’t many of these players. And even if we wanted to add it, it might not be significant because it concerns very few players. Second, we enter data that is of the order of the subjective, difficult to parameterize. And which departs from our approach. If Neymar extends and starts playing matches, it is a value that is rather destined to increase. But for now, the deal is this.